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Aam Aadmi Bima Yojana: Affordable Life Insurance & Financial Security

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Komal Bajpai

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Updated: 28-01-2025 at 7:04 AM

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Aam Aadmi Bima Yojana: Affordable Life Insurance & Financial Security

Aam Aadmi Bima Yojana is one of the most important government schemes being implemented to cater to the social security benefit of workers in the unorganised sector. With this, it charges low premiums provides comprehensive coverage and guarantees that families of insured persons have their financial needs met during hard times.

Overview

The below-mentioned table showcases the key highlights of the Aam Aadmi Bima Yojana scheme:-

Scheme NameAam Aadmi Bima Yojana
Launched By2007
Administered byLife Insurance Corporation of India (LIC)
Target BeneficiariesUnorganised sector workers
Age Limit18 to 59 years
Total Premium₹200 per person per annum
Central Government Contribution₹100
State Government Contribution₹30
Beneficiary Contribution₹70

Read More: Gambhir Bimari Sahayata Yojana: Health Security For Construction Workers

What Is Aam Aadmi Bima Yojana?

Aam Aadmi Bima Yojana is a life insurance scheme targeted at low-paid workers in the unorganised sector. It protects against death and disability and operates under the LIC of India. The premium is very cheap because the government subsidises it for everyone.

What Is Covered Under AABY?

There is coverage in the event of natural death, accidents, and disabilities under AABY. Below is the coverage offered under different conditions:

Coverage TypeSum Assured
Natural Death₹30,000
Accidental Death₹75,000
Partial Disability₹37,500
Total Disability₹75,000
Scholarship₹100/month per child (up to 2 children in grades 9-12)

What Is Not Covered Under Aam Aadmi Bima Yojana?

The govt scheme does not cover death due to suicide, drug overdose, or injuries caused by risky activities like adventure sports. Natural deaths are covered, but not deaths due to pre-existing diseases.

Some of the situations that are not included in AABY are as follows; These include: -

  • Hospitalisation expenses

  • Suicide

  • Death due to substance abuse

  • Dying or getting crippled (disabled) while indulging in life-threatening adventure or war-like conditions

  • Psychiatric disorders or involvement in illicit practices

How To Claim Aam Aadmi Bima Yojana?

To claim insurance for the Aam Aadmi Bima Yojana, the insured's nominee must submit a claim form along with relevant documents like death or disability certificates to the nearest LIC branch or authorised office within 30 days of the incident. The claim is processed, and the amount is directly transferred to the nominee’s bank account.

Read More: Bina Mulya Samajik Suraksha Yojana

Features

The scheme provides life insurance coverage for rural and economically weaker sections of society. It offers accident insurance and scholarships for two children per family up to class 12.

  • Affordable Premiums: The government subsidises the cost, making it accessible to everyone.

  • Financial Assistance: Offers coverage in case of death or disability.

  • Support for Women: Special benefits for female-headed households.

  • Scholarship Benefit: Children of the insured receive a scholarship if the insured dies.

Benefits

Beneficiaries of Aam Aadmi Bima Yojana receive ₹30,000 for natural death, ₹75,000 for accidental death and ₹1.5 lahks for permanent disability. A scholarship of ₹600 per child is also provided to eligible children.

  • Financial Assistance: Supplements the income of the family of the insured in case of his/her death or total and permanent disability.

  • Subsidised Premiums: Puts a favourable and affordable price of life insurance policies within the reach of every client.

  • Covers Natural Calamities: Insurance widens to events such as flooding and the occurrence of an earthquake.

  • Scholarship Benefit: Offers Rs. 100 per month for up to two children who are between 9th and 12th standard of education.

Read More: Mahatma Jyotiba Phule Jan Arogya Yojana

Eligibility Criteria

The government scheme is available to individuals aged 18 to 59 years, belonging to below-poverty-line families or families with marginal incomes involved in specified occupations.

The following are the eligibility criteria for the Aam Aadmi Bima Yojana:-

  • Age: Between 18 and 59 years.

  • Income: The applicants’ annual income should not be more than Rs. 1,00,000.

  • Occupation: It is required that applicants be engaged in unorganised sectors such as agriculture as an employer, fishery, construction and the rest.

  • Social Security: No other schemes of social security such as NPS or ESI should apply to it.

Exclusions

People above 59 years, individuals with stable and high incomes, and those involved in non-specified occupations are excluded from the scheme. AABY does not cover individuals who are:

  • Working in the organised sectors.

  • Income taxpayers.

  • Above 59 years of age.

  • They are already benefiting from other insurance schemes which are in existence.

  • Not the primary breadwinner.

Occupation Included In The Yojana

The Aam Aadmi Bima scheme covers occupations like agricultural labourers, fishermen, artisans, beedi workers, and individuals engaged in similar unorganised sectors.

SectorOccupations
Agriculture & RuralPrimary Milk Producers, Sheep Breeders, Rural Poor, Rural Landless Households, Agriculturists, Toddy Tappers, Plantation Workers, Forest Workers, Salt Growers
Handicrafts & WeavingHandloom Weavers, Khadi Weavers, Sericulture, Handicraft Artisans, Manufacture of Wood Products, Manufacture of Leather Products
Construction & LaborBrick Kiln Workers, Construction Workers, Carpenters, Hamals, Safai Karamcharis
Transport & Self-employedRickshaw Pullers/Auto Drivers, Transport Drivers Association, Overseas Indian Workers, Self-employed Persons
Manufacturing & ProcessingBeedi Workers, Fishermen, Coconut Processors, Manufacture of Paper Products, Rubber & Coal Products, Chemical Products (e.g., candle making), Food Processing (e.g., Khandsari/Sugar), Mineral Products (e.g., earthen toys manufacture), Fire Crackers’ Workers
Textile & LeatherTextile Workers, Leather & Tannery Workers, Powerloom Workers, Papad Workers (SEWA attached), Lady Tailors
Healthcare & EducationAnganwadi Teachers, Physically Handicapped Workers, Women Associated with Self-Help Groups, Hilly Area Women
MiscellaneousTendu Leaf Collectors, Cobblers, Karmacharis, Safai Karamcharis, Printing Workers

Online And Offline Registration

For Online and offline registration of Aam Aadmi Bima Yojana, visit the nearest Life Insurance Corporation (LIC) office or Common Service Center (CSC), fill out the application form, and submit the required documents like proof of identity and occupation.

Here are the steps to apply for the Aam Aadmi Bima Yojana online:

Step 1:

Access the official website of the company – LIC: Use the link to the official website of LIC for Aam Aadmi Bima Yojana.

Step 2:

Go on the ‘Aam Aadmi Bima Yojana Apply Online’ page: Fill in the application section, especially for AABY registration.

Step 3:

They also insist on getting the application form filled: Fill all the necessary information in the online form appropriately.

Step 4:

Upload necessary documents: Copy and upload the necessary documents including the scanned results of the Aadhaar card and proof of income.

Step 5:

Apply: To finalise the registration, please press the ‘Submit’ button.

To register Offline for the AABY scheme, follow these steps:

Step 1:

Collect the application form from the nearest nodal agency or LIC office.

Step 2:

Fill out the form and attach the required documents.

Step 3:

Submit the form to your nearest LIC office.

.

Step 4:

Nominate a beneficiary, which is essential for claiming benefits.

Application Process

Applicants can apply through their respective Gram Panchayats, Block Offices, or CSCs by filling out the form and providing necessary documentation like income and occupation proofs.

Step 1: Borrow the application form from the nearest AABY centre or insurance agent.

Step 2: Please complete the given information and enclose the following documents.

Step 3: Take the form complete it and submit the same at the nearest LIC office.

Step 4: After validation, the policy certificate will be released.

Documents Required

Essential documents include an Aadhaar card, income certificate, proof of occupation, and a bank account passbook for claim settlements.

  • Aadhaar Card.

  • Birth certificate or the School Leaving certificate.

  • Photo Identification (Voter ID, Passport, Aadhaar Photocopy) as well as Proof of Residence (Electricity bills, Ration cards, etc.).

  • Bank account details.

  • Income Certificate.

  • Occupation proof.

Steps To Claim Benefits

In the event of a claim for Aam Aadmi Bima Yojana, beneficiaries must submit the death or disability certificate, insurance policy, and identification proof to the LIC office. The claim process typically takes up to 30 days for settlement.

Step 1: The claim form has to be submitted along with relevant papers like a death or disability certificate.

Step 2: Any attempt must be made in writing within the next thirty days following the occurrence of the said event.

Step 3: Once the details of the claim have been confirmed, LIC will process the same.

Step 4: The amount will be directly credited to the account of the nominee.

Read More: Pradhan Mantri Jeevan Jyoti Bima Yojana PMJJBY

Conclusion

In conclusion, Aam Aadmi Bima Yojana helps provide social security to the workers of the unorganised sector of India. This is because the scheme offers fairly low premiums for a wide range of coverage to make sure the financial burden of the insured workers’ families is well catered for during the worst times. In this emerald scheme, qualifying employees must subscribe to the system to guarantee the future of their family.

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Komal Bajpai

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Bio

Komal Bajpai is a seasoned content writer with 3 years of expertise in political journalism, specializing in crafting compelling press releases for government policies and schemes. Currently, she lends her talents as a Junior Content Writer at Jaagruk Bharat, where she continues to inform and engage the public with her insightful writing. She is a Certified Journalist with a graduate degree in Journalism and Mass Communication from the University of Lucknow and is currently studying Business Administration. Komal is a skilled writer who uses her talent to empower the citizens of India by bridging the gap between Indian society and GOI schemes, laws, policies, and yojanas.... Read more

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